Former Vancouver investment adviser Bradley Moynes is charged with multiple counts of securities fraud.
The U.S. Securities and Exchange Commission has added another B.C. resident and stock promoter to its growing list of suspected fraudsters involved in a scheme involving more than $1 billion in deals orchestrated out of Vancouver. .
Bradley Moynes, 51, a former Vancouver investment adviser turned cryptocurrency promoter is facing civil allegations of securities fraud, according to a complaint filed June 27 by the commission (SEC) in Boston. His companies Digatrade Financial Corp. and Vancap Ventures are co-accused.
Moynes is accused of working with offshore facilitator Fred Sharp, a former Vancouver lawyer who was charged with fraud by the commission last August.
Sharp has not responded to the charges and now owes the commission US$52.9 million following a May 12 default judgment. He also faces criminal charges with members of his so-called “Sharp Group”. The group is said to have orchestrated hundreds of “pump and dump” schemes using offshore shell companies with named owners, between 2011 and 2019.
According to the complaint, Moynes became a Sharp Group customer in March 2014, when Moynes was president of Formcap Corp., a Nevada company.
Phone records obtained by the commission purport to show that Sharp split 95% of tradable Formcap shares into blocks of less than 5% held by the offshore companies, thereby avoiding reporting requirements and scrutiny by foreign brokerage firms, which held shares, as well as transfer agents, who are supposed to oversee deposits.
Moynes then “strategically issued” press releases and funded promotions about the company (the “pump”) while ordering Sharp to sell the shares (the “vacuum”) and pay the proceeds into a Canadian company named Vancap Ventures, which is solely owned by Moynes.
The commission says Moynes never reported those sales. Given his background as an investment adviser, he should have known that securities laws required him to do so, the commission said.
Moynes reportedly personally benefited from $256,000 from Formcap.
A similar simultaneous pattern occurred with Digatrade; however, Moynes, president and CEO of Digatrade, was able to reap $533,000 in net profits, according to the commission – at least initially.
Those involved then stepped up their alleged actions in mid-2016, the commission said, with a series of stock market maneuvers, including the issuance of eight million new unrestricted shares to nominee companies held by Moynes.
The complaint claims that Moynes was then in contact with New York lawyer and Mexican citizen Luis Carillo, who allegedly orchestrated a promotional campaign through a boiler room (high-pressure call center) based in Medellin, Colombia.
The boiler room was reportedly operated by Frank Biller, who has also been indicted by the SEC.
Biller was convicted in British Columbia of criminal fraud and theft in 2005 for his part in the highly publicized Eron Mortgage Corp Ponzi scheme. based in British Columbia until the late 1990s. The Eron Mortgage saga is one of, if not the, largest financial fraud cases in BC history. It attracted media attention given the huge number of casualties.
In February 2018, Moynes and his associates sold 24.3 million shares of Digatrade and generated a net profit of $5.9 million, of which Moynes kept $1.3 million, according to the commission’s complaint.
Moynes is charged with fraud in the offer or sale of securities, fraud in connection with the purchase or sale of securities and unregistered offers of securities.
Moynes is presumed innocent until proven guilty in court.
Proceedings take place in the Federal District Court of Massachusetts; this is where the commission laid charges because Digatrade sold shares in the US over-the-counter market to investors there.
The commission is asking for the return of the funds, some form of monetary penalty and a permanent ban from the markets.